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Dai-ichi Life agrees to purchase Protective Life for $5.7bn

Japan-based Dai-ichi Life Insurance Company (DLI) has reached an agreement to purchase all outstanding shares of US-based insurer Protective Life, as part of a strategy to boost its presence in the US.


Under the terms of the definitive agreement, Dai-ichi Life will pay $70 per share in cash, a 34% premium over Protective’s unaffected closing stock price of $52.30 on 30 May 2014, valuing total transaction at nearly $5.7bn.

Upon completion of the transaction, the integrated company with total assets of $424bn will become the 13th largest global insurer. Additionally, Protective will act as Dai-ichi Life’s US growth platform and maintain current strategy, operations and headquarters.

Furthermore, Protective president and CEO John Johns and the current management team will continue to lead the business.

Dai-ichi Life president Koichiro Watanabe said: "With a strong leadership team, vibrant and growing retail franchise and long track record of profitable growth organically and through the acquisition and integration of attractive businesses, Protective is the ideal platform for expansion."

Protective president and CEO John Johns commented: "This transaction will enable Protective to deliver substantial, immediate cash value to our shareholders while maintaining our mission and continuing on our growth trajectory."

Approved by both companies’ boards of directors, the transaction is likely to complete by the end of 2014 or early 2015, subject to Protective stockholders’ approval, regulatory approvals in Japan and the US, and other customary closing conditions.

Dai-ichi Life plans to fund the transaction through cash in hand and supplementary sources if necessary.

Goldman Sachs and Morgan Stanley are serving as financial advisor to Dai-ichi Life and Protective, respectively. Baker & McKenzie and Willkie, Farr & Gallagher are acting as legal advisors for Dai-ichi Life, whereas Debevoise & Plimpton is serving as legal advisor for Protective.

Headquartered in Tokyo, Dai-ichi Life was established in 1902 and has operations in Japan, Australia, Vietnam, Indonesia, India and Thailand.
———————————————————————————————————————————————————————————————-Image: DN Tower 21, headquarters of The Dai-ichi Mutual Life Insurance Company in Chiyoda, Tokyo, Japan. Photo: courtesy of Rs1421.